A common error of business managers is to blame inflation on
a. consumer spending.
b. rising wages.
c. rising prices.
d. rising interest rates.
e. rising unemployment.
b
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Refer to Table 10.1. Suppose that all of the information given in the Table remains the same except that taxes increase by $1.0 billion and transfers increase by $1.5 billion
If potential GDP equals $30 billion, by how much would government purchases have to change for equilibrium GDP to equal potential GDP? A) $1 billion B) $1.25 billion C) $1.5 billion D) $5 billion
After the deregulation of the airline industry, the new airlines had a competitive cost advantage over the older ones as:
a. they could practice price discrimination. b. they did not bear any legacy cost. c. they enjoyed economies of scale. d. they had to pay lower fuel surcharge.
The primary purpose of measuring the overall level of prices in the economy is to
a. allow for the measurement of GDP. b. allow consumers to know what kinds of prices to expect in the future. c. allow for the comparison of dollar figures from different points in time. d. allow for the comparison of dollar figures from the same point in time.
Three business people meet for lunch at an Indian restaurant. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. When the food is delivered to the table, each person faces incentives similar to the
a. consumption of a common resource good. b. production of a public good. c. consumption of a club good. d. production of a private good.